RPI: Selective Licensing update

Councils around the country have taken different views on the issue of licensing. The RLA bi-monthly member magazine Residential Property Investor (RPI) investigates. Liverpool, London Boroughs, Sandwell in the West Midlands, Milton Keynes, Nottingham and Boston in the East Midlands, Blackburn and Bristol in England and Wales are all discussed.

The London borough of Newham’s landlord licensing scheme was a first, in that it took in all private rented properties across the borough.

The blanket ban came into effect on January 1, 2013, and has proved something of a template for other local authorities.

Since its launch, the Newham scheme has received over 32,000 applications, of which 100 were turned down. The council has issued 5,078 warning letters, issued 82 cautions for first offences, prosecuted 134 landlords for breaches and imposed fines – the biggest to date being £12,000.

Almost 2,000 unlicensed premises have been visited and the council is putting resources into tracking down landlords not registered with them and who are operating under the radar.

Importantly, Newham’s main justification for its licensing scheme was to encourage landlords to take a proactive approach in dealing with anti-social behaviour by their tenants.

Liverpool City Council is seeking to implement a similar city-wide selective licensing scheme for private landlords.

However, Liverpool is not seeking to introduce blanket licensing on the primary ground of anti-social behaviour in tenants.

It is also taking its time over introducing the scheme.

Meanwhile, Blackburn Council has implemented selective licensing in some areas, while the London borough of Brent, Sandwell in the west midlands and Nottingham councils are also considering schemes.

Barking and Dagenham Council, in east London, will introduce a borough-wide scheme from September 1. Private sector landlords in the borough will be required to pay £180 for a five-year licence. After September 1, the price will rise to £500.

In Wales, there were will licensing throughout the country under the proposals of the Housing (Wales) Bill.

Following examination by a committee of Welsh MPs, this is likely to be phased in.

Requirements for landlords could include mandatory electrical safety checks, plus a duty to give tenants seven days’ notice of any landlord inspections of the property.

Under the Welsh licensing scheme, tenants will not have to pay rent if their agent or landlord has their licence revoked, and will be protected from eviction.

However, licensing does not appeal to some English councils that have investigated the idea – and in some cases, got close to introducing it.

Landlords in Milton Keynes successfully persuaded the council to abandon plans to introduce a city-wide licensing scheme there. Similarly, Poole in Dorset has walked away from initial ambitions to launch licensing schemes.

At Boston Council in the east midlands, the corporate and community scrutiny committee has voted in favour of putting licensing on hold.

A consultation showed widespread opposition – out of 371 landlords/letting agents and 106 tenants who responded, 89% of the former and 75% of the latter did not support licensing.

Borough officer Andy Fisher also told the meeting that a £109,000 Government grant given to the council to work with the Gangmasters Licensing Association to tackle bad landlords was being used effectively.

A ‘storey’ of mandatory licensing

Meanwhile, some local authorities are taking legal advice after issuing licences for Houses in Multiple Occupation, which are mandatory in HMOs of three storeys or more and occupied by five or more tenants.

It follows a case last year between Bristol Council and student letting agency DIGS (Bristol) over the licensing of a maisonette.

No licence had been sought for this property, which the council said was a three storey HMO. Entry to the maisonette was via a ground-floor lobby and staircase up to the accommodation.

The High Court ruled that the lobby did not constitute a storey, meaning that the property was only two storeys and did not require an HMO licence.

Newcastle Council is one of those authorities now taking advice. It has issued some 700 licences for 700 maisonette HMOs and may have to pay back over £750,000.

A further issue for Newcastle and other authorities could be if landlords claim for expenditure – which could now turn out to have been unnecessary – on bringing their property up to licensable standards.

A Newcastle Council spokesperson said: “Licensing of HMOs was introduced to ensure that tenants are protected by adequate health and safety standards and the proper management of properties.

“A recent High Court case involving Bristol Council deemed that a particular three storey property in Bristol was not a licensable HMO. We are obtaining legal advice in respect of the position of some licensed properties in Newcastle and whether they are affected by the Bristol decision.”

About the author

RLA

The Residential Landlords Association (RLA) represents the interests of landlords in the private rented sector (PRS) across England and Wales. With over 23,000 subscribing members, and an additional 16,000 registered guests who engage regularly with the association, we are the leading voice of private landlords. Combined, they manage almost half a million properties.

7 Comments

My five flats are in Barking and Dagenham.
Having discussed it with an official from the Council, it appears that I cannot get a single licence to license me but must apply for five licences.
How absurd.
I only need one driving licence however many cars I own or drive.
Tim Moore

Well Mr Brown, are you confirming that licensing is a form of taxation? If so it is an abuse. If it is a license to confirm a person is fit then it should be one single charge NATIONWIDE. Your comment confirms suspicions that it is cash cow council tactics

This seems to be GREEDY councils seeing a money generation opportunity and fleecing people where they can. Its the same as the Parking cash cow since councils became the enforcing agency.

Geoff- forgive me I didn’t wish to imply the wrong impression with my comment merely making the relevant point! I am not advocating this taxation sir infact I’m fighting my local council daily on the matter.

We bought two tenanted properties in Hendon, Sunderland that were already included in a selective licensing scheme started a year previously. So the properties were already of the required standard. All the council had to do was check we were suitable landlords. For this they charged us Â£600 for the first property and Â£575 for the second.How can they justify this if all they are allowed to charge is for their costs to administer the scheme?

All of these are revenue generators, some highly arbitrary and questionable due to failings of central govt. (cut backs) and greed of local govt. They punish the many (Landlords) indiscriminately for the failings of a small minority of landlords. But yet these perverse MPs and Local authorities DO NOT appropriate sanctions and penalties against their own lot for most of their failings. Example recently resigned female minister, on expenses scandal, after a lot of publicity and pressure, despite support from the prime minister.
It is a fact that most of our MPs cannot and are not fit to run the country, otherwise what were they doing (voting for massive budget deficits) when the country was gradually sinking under the massive debt burden from 1997 to 2010. It is necessary to link MPs pay to country’s economic performance, pay them national average wage + 10% as they get excessively generous expenses. there’s more but time and space limits.

About Author

RLA

The Residential Landlords Association (RLA) represents the interests of landlords in the private rented sector (PRS) across England and Wales. With over 23,000 subscribing members, and an additional 16,000 registered guests who engage regularly with the association, we are the leading voice of private landlords. Combined, they manage almost half a million properties.